Michigan considers $10 minimum wage

[Norstal]

What a load of nonsense. If you're going to give out examples to prove our points, I'll direct you towards most of the minimum wage using Western world and be done with it.

Haiti is in the west while Singapore is in the east. Haiti's minimum wage has not helped poverty. Singapore is doing far better than Haiti.

You want a western country with minimum wage: Haiti is a good starting point.

I've been to Singapore. You're right that no bums live there. Because only rich people live there. So a minimum wage would be absurd since everyone is making money overseas except for migrant workers.

[Imperiatom]

This due to stagnant wage rates for at lest the ten years after whilst inflation keeps rising.

Do you not know that the minimum wage has risen significantly since 1999?

It started out at £3.60 and is now £6.19. That's a 72% increase over 13 years.




By all means, though, carry on explaining how it has fucked the public, with your massive breadth and depth of management expertise and sociological knowledge.

Yes and the going rate for a low paid job where i live was around £5.70 when it was brought in. Now all of a sudden my father and other businesses legally only had to pay £3.60. Que 10 years of wage stagnation whilst living costs went up 25%.

[Imperiatom]

I would say the market sets a livable wage as it is where Demand most efficiently meets supply if there is no government intervention. If i don't offer enough pay the interviewee will not take the offer of the job, if i offer too much i get over supply. I would argue government intervention leads to a glut in supply, I may look for more automation instead of labour for long term cost savings. This leads me to believe that whilst there is little effect on the employment levels of the skilled, unskilled labour now looks much more expensive. For this reason i feel a minimum wage level harms the lowest payed and the unskilled disproportionaly among the unemployed as it makes the employment of skilled labour more attractive. Thus leaving the poorest and the minorities stuck in "ghettos" they are trapped in and thus stopping the unskilled from gaining the first rung of the ladder. It creates a more unequal society and not less.

That isn't always the case. Where the free market nestles into equilibrium is theoretically economically efficient. But economic efficiency has a very particular definition, as the point where no one person can be made better off without made at least one other person worse off. In other words, it brings us to the point where total welfare is maximised. But that's all it says. It doesn't imply anything about the distribution of welfare, or whether it is equitable, fair or "good". That's why there is government intervention. If the supply of labour is high enough, which it will be in a recession when jobs are scarce, firms are capable of setting a lower wage and maximising their profits through cheap input costs. This means that producer welfare will be relatively higher than consumer welfare, and while that equilibrium might be efficient, it is by no means "good", and intervening to force producers to raise their wages will redistribute welfare in a more equitable way. That's the principle behind it.

You bring up some fair points, though; that a higher wage for low skilled workers could lower the opportunity cost of purchasing higher skilled workers. It certainly could, but it doesn't seem as though studies on the impact of minimum wage hikes have identified something like that occurring.

It has in our business, when my father opened in 1985 he was the only employee with a degree whilst now around half the workforce have one, whilst a quarter of the rest are not old enough to have one yet. When one can employ a university graduate desperate for a job or a being of less than average intelligence who left school at 16 for about the same wage, which do you think i am going to chose?

[Imperiatom]

Minimum wage goes up, i put up my prices, I collect back the money i lost through the higher wage costs, through higher prices. Inflation rises further and the worker is not any better off.

It just costs the government money to implement.

The argument about "raising prices" is this:

Let's say I see widgets at $10 each. And I sell 50 a day. So my business makes $500 a day. Then I spend $300 in labor, and $50 in other expenses. So my profit is $150 a day. But then my labor costs go up by $100 a day. Now my total expenses are $450 and my income is $50. Well I know what I'll do, I'll raise my prices, I'll sell widgets for $12.00 each, that way I'll make $600 a day! I'll keep my income, and the consumer will have to bare the cost of my increased labor!"

And that argument makes a lot of sense. With the exception of one teeny weeny itsy bitsy tiny little problem. Primarily, you don't understand economics. Or, to put it a different way, if raising your prices would have increased your revenue.....why haven't you done that already?

I mean, really, this is the fatal flaw of any "well they'll just raise their prices!" counter. Any business, from mom and pop, to international conglomerates, has one goal, and one goal only. Maximize profits. If I sell 50 widgets a day, at $10 or $12...why would I have been selling them for $10 in the first place? This argument only works in this bizarre land of make believe where business could have raised prices, could have increased profits but, until this point, just....chosen not to, for some reason.

Or, to put this in a very simplistic way, if business could have increased prices without decreasing profits they would have done this already. Prices will naturally gravitate towards a revenue maximizing value regardless of what your expenses are.

That is economics rule #1.

. The rise in the minimum wage is designed to transfer money from rich to poor if prices stayed the same. But as you know it does not fix prices, so I raise my prices to channel that money from the poor back to the rich, thus maintaining my previous equilibrium in Profit . Therefor in real terms the employees are being paid the same and i am making the same as before the rise, the only difference is that the numbers i am dealing with are numerically larger than before.


EDIT: As a side note after spending most of my summers learning the business and dealing with the public since i was 14, i can testify that at least 80% of the public are indeed that stupid. One would not believe some of the stupidity unless one had seen it in the flesh. Some of these people don't even know that mahogany is actually a type of wood! and are surprised when i tell them it needs wood treatment to preserve it.

[Welstonia (Ancient)]

If you raise wages things will be more expensive to make and so stuff will get more expensive.

A better solution would be to have very low taxes on the lower class.

Alot of the lower class people get all their taxes refunded, what they are paying into is social security and medicare, which they will directly benefit from, proportionately to what they pay in.

[Cannot think of a name]

The argument about "raising prices" is this:

Let's say I see widgets at $10 each. And I sell 50 a day. So my business makes $500 a day. Then I spend $300 in labor, and $50 in other expenses. So my profit is $150 a day. But then my labor costs go up by $100 a day. Now my total expenses are $450 and my income is $50. Well I know what I'll do, I'll raise my prices, I'll sell widgets for $12.00 each, that way I'll make $600 a day! I'll keep my income, and the consumer will have to bare the cost of my increased labor!"

And that argument makes a lot of sense. With the exception of one teeny weeny itsy bitsy tiny little problem. Primarily, you don't understand economics. Or, to put it a different way, if raising your prices would have increased your revenue.....why haven't you done that already?

I mean, really, this is the fatal flaw of any "well they'll just raise their prices!" counter. Any business, from mom and pop, to international conglomerates, has one goal, and one goal only. Maximize profits. If I sell 50 widgets a day, at $10 or $12...why would I have been selling them for $10 in the first place? This argument only works in this bizarre land of make believe where business could have raised prices, could have increased profits but, until this point, just....chosen not to, for some reason.

Or, to put this in a very simplistic way, if business could have increased prices without decreasing profits they would have done this already. Prices will naturally gravitate towards a revenue maximizing value regardless of what your expenses are.

That is economics rule #1.

. The rise in the minimum wage is designed to transfer money from rich to poor if prices stayed the same. But as you know it does not fix prices, so I raise my prices to channel that money from the poor back to the rich, thus maintaining my previous equilibrium in Profit . Therefor in real terms the employees are being paid the same and i am making the same as before the rise, the only difference is that the numbers i am dealing with are numerically larger than before.


EDIT: As a side note after spending most of my summers learning the business and dealing with the public since i was 14, i can testify that at least 80% of the public are indeed that stupid. One would not believe some of the stupidity unless one had seen it in the flesh. Some of these people don't even know that mahogany is actually a type of wood! and are surprised when i tell them it needs wood treatment to preserve it.

Once again though, we have seen that what you do is statistically insignificant and contrary to how the rest of the world behaves.

If the question was, "How is minimum wage going to effect the outdoor furniture store owned by some dude who inherited it from his dad somewhere in Britain," then it would be relevant. But in how it effects the work force and prices, we have studies that say most businesses do the opposite of what you do, making your assertions about what you would do meaningless.

[Imperiatom]

. The rise in the minimum wage is designed to transfer money from rich to poor if prices stayed the same. But as you know it does not fix prices, so I raise my prices to channel that money from the poor back to the rich, thus maintaining my previous equilibrium in Profit . Therefor in real terms the employees are being paid the same and i am making the same as before the rise, the only difference is that the numbers i am dealing with are numerically larger than before.


EDIT: As a side note after spending most of my summers learning the business and dealing with the public since i was 14, i can testify that at least 80% of the public are indeed that stupid. One would not believe some of the stupidity unless one had seen it in the flesh. Some of these people don't even know that mahogany is actually a type of wood! and are surprised when i tell them it needs wood treatment to preserve it.

Once again though, we have seen that what you do is statistically insignificant and contrary to how the rest of the world behaves.

If the question was, "How is minimum wage going to effect the outdoor furniture store owned by some dude who inherited it from his dad somewhere in Britain," then it would be relevant. But in how it effects the work force and prices, we have studies that say most businesses do the opposite of what you do, making your assertions about what you would do meaningless.

Seeing as after discussing this policy at length with my peers, (Many of whose fathers own businesses) They would do a similar thing in the same circumstances. Of course we are a small minority in population terms but given that this small minority owns a large majority of private businesses i think it becomes rather more important. The trouble is most of them, me included would in the public domain cite reasons such as increasing material/stock costs as the reason for the price increase. This is much more acceptable to the world at large. Most people believe this whether it is the case or not, especially as given that our business is not a publicly traded enterprise our accounts don't have to be made public, knowbody can find out the truth anyway.


Edit: it could also be the truth if our suppliers put up their prices due to the wage increase.

[The Joseon Dynasty]

That isn't always the case. Where the free market nestles into equilibrium is theoretically economically efficient. But economic efficiency has a very particular definition, as the point where no one person can be made better off without made at least one other person worse off. In other words, it brings us to the point where total welfare is maximised. But that's all it says. It doesn't imply anything about the distribution of welfare, or whether it is equitable, fair or "good". That's why there is government intervention. If the supply of labour is high enough, which it will be in a recession when jobs are scarce, firms are capable of setting a lower wage and maximising their profits through cheap input costs. This means that producer welfare will be relatively higher than consumer welfare, and while that equilibrium might be efficient, it is by no means "good", and intervening to force producers to raise their wages will redistribute welfare in a more equitable way. That's the principle behind it.

You bring up some fair points, though; that a higher wage for low skilled workers could lower the opportunity cost of purchasing higher skilled workers. It certainly could, but it doesn't seem as though studies on the impact of minimum wage hikes have identified something like that occurring.

It has in our business, when my father opened in 1985 he was the only employee with a degree whilst now around half the workforce have one, whilst a quarter of the rest are not old enough to have one yet. When one can employ a university graduate desperate for a job or a being of less than average intelligence who left school at 16 for about the same wage, which do you think i am going to chose?

Aren't there qualities more important in the outdoor furniture industry than a university education? The purpose of a university education, in purely economic terms, is to signal to employers that you're a safer hire than others in the labour market, since employers cannot otherwise distinguish which workers are better than others. But in a low-skilled business such as yours, or so I've interpreted, where skill isn't really signalled by a university education, the value of that particular signal will naturally diminish.

It's why the businesses that the minimum wage impacts most strongly won't behave as you're suggesting, since they're very often low-skilled, practical and hands-on.

[Frisivisia]

Once again though, we have seen that what you do is statistically insignificant and contrary to how the rest of the world behaves.

If the question was, "How is minimum wage going to effect the outdoor furniture store owned by some dude who inherited it from his dad somewhere in Britain," then it would be relevant. But in how it effects the work force and prices, we have studies that say most businesses do the opposite of what you do, making your assertions about what you would do meaningless.

Seeing as after discussing this policy at length with my peers, (Many of whose fathers own businesses) They would do a similar thing in the same circumstances. Of course we are a small minority in population terms but given that this small minority owns a large majority of private businesses i think it becomes rather more important. The trouble is most of them, me included would in the public domain cite reasons such as increasing material/stock costs as the reason for the price increase. This is much more acceptable to the world at large. Most people believe this whether it is the case or not, especially as given that our business is not a publicly traded enterprise our accounts don't have to be made public, knowbody can find out the truth anyway.


Edit: it could also be the truth if our suppliers put up their prices due to the wage increase.

What is it with you and bragging about how wealthy your father is? Are you Draco Malfoy?

[Imperiatom]

It has in our business, when my father opened in 1985 he was the only employee with a degree whilst now around half the workforce have one, whilst a quarter of the rest are not old enough to have one yet. When one can employ a university graduate desperate for a job or a being of less than average intelligence who left school at 16 for about the same wage, which do you think i am going to chose?

Aren't there qualities more important in the outdoor furniture industry than a university education? The purpose of a university education, in purely economic terms, is to signal to employers that you're a safer hire than others in the labour market, since employers cannot otherwise distinguish which workers are better than others. But in a low-skilled business such as yours, or so I've interpreted, where skill isn't really signalled by a university education, the value of that particular signal will naturally diminish.

It's why the businesses that the minimum wage impacts most strongly won't behave as you're suggesting, since they're very often low-skilled, practical and hands-on.

We don't make the products, most come from Brazil or china. We need literate sales people with a good grasp of the English language and who take pride in their own appearance. On the whole most of the best applicants happen to have a degree. We also see these applicants as having more potential for management levels. The other half of the business is your classic garden center, and yes you are right in this side it is much less of an issue. I still find on the whole though that an employee with a university education is less likely to cock up simple tasks, break stock, and more likely to provide better customer service and just generally be a more conscientious worker than your average school drop out. Although I must admit the low skilled are better a dragging boxes and pallets around since to many graduates think that kind of work is beneath them. The higher the minimum wage the less low skilled individuals are employed in the first place, this is one of the main reasons i am against it.

[Imperiatom]

Seeing as after discussing this policy at length with my peers, (Many of whose fathers own businesses) They would do a similar thing in the same circumstances. Of course we are a small minority in population terms but given that this small minority owns a large majority of private businesses i think it becomes rather more important. The trouble is most of them, me included would in the public domain cite reasons such as increasing material/stock costs as the reason for the price increase. This is much more acceptable to the world at large. Most people believe this whether it is the case or not, especially as given that our business is not a publicly traded enterprise our accounts don't have to be made public, knowbody can find out the truth anyway.


Edit: it could also be the truth if our suppliers put up their prices due to the wage increase.

What is it with you and bragging about how wealthy your father is? Are you Draco Malfoy?

I speak the truth, Yes i went to this school http://www.bradfieldcollege.org.uk/Pages/default.aspx. Yes most of my peers are rich and plenty of my peers parents owned businesses. This is my experience of the world and if our way of doing business was rubbish none of us would have ended up with such an education and there would be no inheritance to be had, since we did and there is i would say my way of doing things works quite well. The wealth is evidence for my practices working in reality, They work great for me and my friends. Maybe if you followed them you could join us, We always welcome a fellow entrepreneur with open arms no-matter what nationality or political leanings.

The reason i never fire workers when the minimum wage goes up is because we are already at the minimum level of staffing to be efficient( incidentally this is also why prices have to go up as they are the only way of maintaining the same profit margin) . Would i employ more people if the minimum wage was set by the market? Probably since the wage difference between skilled labour that can use technology and the unskilled would be much greater. My price levels would also probably be lower too to fit the new wealth demographic. (so i can continue to profit maximize) This is why i believe it adds to unemployment. Even if its just 1% rise in unemployment, this would lead to in the US for example around an extra 3 million unemployed.

EDIT: No i am not Draco malfoy but if he was not a wizard i would have gone to school with him

[New Rogernomics]

S10 is still wage slavery, propose $50-60 an hour and I might consider supporting it with great applause.

[Imperiatom]

S10 is still wage slavery, propose $50-60 an hour and I might consider supporting it with great applause.

I don't mind, most businesses would have to triple their price overnight but hey if the illusion of being better off works for you then great.

[Sibirsky]

S10 is still wage slavery, propose $50-60 an hour and I might consider supporting it with great applause.

That would not end well.

[New Rogernomics]

S10 is still wage slavery, propose $50-60 an hour and I might consider supporting it with great applause.

I don't mind, most businesses would have to triple their price overnight but hey if the illusion of being better off works for you then great.

No they don't, that is another myth of the anti-minimum wage lobby. If one company raises prices, others need not follow suit and thus reap the rewards of undercutting their competition.

[Sibirsky]

I don't mind, most businesses would have to triple their price overnight but hey if the illusion of being better off works for you then great.

No they don't, that is another myth of the anti-minimum wage lobby. If one company raises prices, others need not follow suit and thus reap the rewards of undercutting their competition.

That is not what he said.

Labor is typically a business' largest cost. You just increased that cost by a factor of 5 or 6. How do you propose that cost be paid for?

[New Rogernomics]

No they don't, that is another myth of the anti-minimum wage lobby. If one company raises prices, others need not follow suit and thus reap the rewards of undercutting their competition.

That is not what he said.

Labor is typically a businesses largest cost. You just increased that cost by a factor of 5 or 6. How do you propose that cost be paid for?

Higher wages will result in greater consumer purchacing power, thus there will substantial economic growth making up for any short term losses.

[Imperiatom]

I don't mind, most businesses would have to triple their price overnight but hey if the illusion of being better off works for you then great.

No they don't, that is another myth of the anti-minimum wage lobby. If one company raises prices, others need not follow suit and thus reap the rewards of undercutting their competition.

I can tell you that there is probably not a single business (with perhaps the banking sector, and certain raw materials as an exception) That could adsorb a 1000% increase to the wage bill without also raising prices by a similar %.

[The Joseon Dynasty]

That is not what he said.

Labor is typically a businesses largest cost. You just increased that cost by a factor of 5 or 6. How do you propose that cost be paid for?

Higher wages will result in greater consumer purchacing power, thus there will substantial economic growth making up for any short term losses.

And the businesses whose operating costs have just sky-rocketed will respond how?

[The God-Realm]

10$? Decent.

[New Rogernomics]

S10 is still wage slavery, propose $50-60 an hour and I might consider supporting it with great applause.

That would not end well.

http://www.epi.org/publication/declining-federal-minimum-wage-inequality/

Legislated increases in the federal minimum wage in both 2007 and 2008 boosted it from $5.15 in 2006 to $7.25 in 2009, its highest level in real terms since 1981. But even after this nearly 41 percent increase, the minimum wage in 2009 was still 7.8 percent less than its value in 1967 (in 2011 dollars).
In 2011, the minimum wage was worth only about 37 percent of what an average worker earned per hour, not far above its lowest point, reached in 2006, in 47 years.
A higher minimum wage would disproportionately affect women: They constitute a majority (54.5 percent) of those who would benefit, greater than their 48.3 percent share of the workforce. Historically, the minimum wage has been more important in setting a floor for women than for men.
The vast majority (87.9 percent) of those who would be affected by the higher minimum wage are age 20 or older.
A higher minimum wage would help address growing inequality, particularly as it affects lower-wage women. Between 1979 and 2009 the erosion of the minimum wage explained about two-thirds (65.5 percent) of the large 25.2 (log percentage point) expansion of the wage gap between median-wage workers and workers at the 10th percentile in wages—known as the 50/10 wage gap—among women but just over a tenth (11.3 percent) of the smaller 5.3 expansion of the 50/10 wage gap among men. For workers overall more than half (57.0 percent) of the increase in the 50/10 wage gap from 1979 to 2009 was accounted for by the erosion of the minimum wage.

[Welstonia (Ancient)]

No they don't, that is another myth of the anti-minimum wage lobby. If one company raises prices, others need not follow suit and thus reap the rewards of undercutting their competition.

That is not what he said.

Labor is typically a business' largest cost. You just increased that cost by a factor of 5 or 6. How do you propose that cost be paid for?

Well if you look back in history, the minimum wage from the early 70's translates into about 16 dollars an hour today. So I think we can manage the slightly higher costs, and I think the owners of Walmart and McDonalds can handle paying their people a bit more.

[Imperiatom]

That is not what he said.

Labor is typically a businesses largest cost. You just increased that cost by a factor of 5 or 6. How do you propose that cost be paid for?

Higher wages will result in greater consumer purchacing power, thus there will substantial economic growth making up for any short term losses.

All this proves why economic growth is not the be all and end all. Yes in technical terms we have more growth whoo!! in reality we have a total clusterfuck in the real economy and hyperinflation, totally screwing over the old and the unemployed and most working people to for that matter. Economic Armageddon !!!!!

[Welstonia (Ancient)]

S10 is still wage slavery, propose $50-60 an hour and I might consider supporting it with great applause.

Your probably looking at 25 being ideal.

[New Rogernomics]

Higher wages will result in greater consumer purchacing power, thus there will substantial economic growth making up for any short term losses.

And the businesses whose operating costs have just sky-rocketed will respond how?

People will buy more products due to having much greater purchasing power, they will have money also to save and invest. Operating costs would only rise in the short term, in the long term they would remain constant.